Assembly Preview – Budget, Mill Rates and Severenc Taxes

Maggie Wall/KMXT

Tonight’s regular Kodiak Island Borough Assembly meeting is expected to be long and contentious as the assembly prepares to patch a 30 percent hole in next year’s budget before July 1st.

Two public hearings tonight include school district funding and a proposed increase in the severance tax. The first has garnered a lot of public support, the later has raised the ire of local fishermen.

School funding has remained steady the past few years, but supporters at a recent assembly work session asked for increased funds. Assembly members discussed funding local schools no higher than current levels.

The resolution set for tonight’s public hearing would establish the minimum amount of funds the borough would provide the school district. The school district has a looming deadline and needs a figure to plug into its budget. The borough assembly could decide at a later date to increase funding for schools.

The second public hearing deals with the severance tax.

Right now the severance tax on resources harvested inside the borough is the same as the mill rate on real property. Borough staff recommends disconnecting the tax from the mill rate and increasing it to a flat 1.5 percent of value on resources. That includes fish, timber and minerals.

But, that is not the end of taxing matters facing the assembly tonight. Two ordinances for introduction also deal with the budget. The first would bring the current budget in line with actual expenses. The second sets the mill rate for property taxes for next fiscal year. If approved tonight, both items will come up for public hearing at a future meeting.

The assembly last year barely voted down putting a sales tax on the fall ballot. Without a sales tax, the assembly has few options for raising the money needed to balance next year’s budget.

The assembly could drastically cut staff and services. It could increase the severance tax. And it could increase property taxes. Or some combination of the three.

At a recent work session, assembly members discussed putting a sales tax on the ballot for the coming fall elections. But any income from such a tax could not be factored into the budget the assembly is currently trying to balance.

Tonight’s borough assembly meeting begins at 7:30 in the borough conference room. As always, KMXT will broadcast the meeting live.

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